Production and Purchases Budgets in Units

At the end of business on June 30, the PE Rug Company had 35,000 square yards of rugs and 100,000 pounds of raw materials on hand. Budgeted sales for the third quarter are

Month	Sales
July	50,000 sq. yards
August	35,000 sq. yards
September	42,000 sq. yards
October	48,000 sq. yards

The PE Rug Company wants to have sufficient square yards of finished product on hand at the end of each month to meet 60% of the following months budgeted sales and sufficient pounds of raw materials to meet 40% of the following months production requirements. Seven pounds of raw materials are required to produce one square yard of carpeting.

Prepare a production budget for the months of July, August, and September and a purchases budget in units for the months of July and August.

PE Rug Company Production Budget For the Months of July, August, & September
	July	August	September
Budgeted production - sq. yards	Answer	Answer	Answer

PE Rug Company Purchases Budget For the Months of July & August
	July	August
Purchases in pounds	Answer	Answer